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4/27/2010

Credit Repair Company Sued

Veracity credit repair is not the guys advertising on the radio that they can wipe out your debt with some
vague new law. On the side of credit card companies, Colorado Attorney General is sueing them for charging an upfront fee, and for misleading a consumer to believe they could "fix" their FICO score.
I have said this before, and we are not finished with the issue in the news but Goldman Sachs now knows that using a MIT Math model is not enough to insure the validity of a CDO.

Read attached:
Colorado ATTORNEY GENERAL ANNOUNCES LAWSUIT

"According to the complaint, filed in Denver County District Court, the credit-repair company is suspected of charging upfront fees for its services, which is illegal under state and federal law. The company, according to the complaint, required that consumers pay an initial setup fee of up to $99 and monthly fees of up to $79. Under Colorado law, a credit-repair firm can only charge fees once its services are complete.

Veracity also is alleged to have failed to disclose to its clients the total amount they would be charged for credit-repair services. The company also advertised that it could “optimize” consumers’ credit records by erasing or repairing bad credit. Under the federal Fair Credit Reporting Act and Colorado Consumer Credit Reporting Act, credit bureaus are allowed to report negative information about a consumer’s credit for seven years and information concerning bankruptcies for 10 years.

“Consumers trying to work their way out of debt and improve their credit should carefully examine the promises any credit-repair company makes,” Suthers said. “Consumers also should beware of any company that charges upfront fees for any credit-repair services. Upfront fees are prohibited under Colorado and federal law.”

Suthers said the Colorado Credit Services Organization Act and similar federal laws prohibit:

• Prohibit untrue or misleading statements and representations;

• Prohibit advance fees for services;

• Require disclosure of the total amount a consumer will have to pay for credit repair services;

• Require disclosure about when accurate information can be removed from credit reports;

• Require disclosure of a consumer’s right to correct inaccurate information; and,

• Providing consumers a five-day right to cancel a credit repair contract."

From Colorado Attorney General John Suthers' office,
Is he the next Cuomo?